Following the foiled Wagner group mutiny, experts have advised that the financial edifices of Russia’s private army be rigorously examined.
Private military contractors (PMCs) have been sanctioned by the UK, but one researcher called the approach ‘uneven’ because Western countries have been focusing on the organisations piecemeal over the past three years.
Wagner refused to sign contracts that would have tied the PMCs more closely to Vladimir Putin‘s Ministry of Defence in the days leading up to and following the uprising.
Calls had been growing before the mutiny, where leader Yevgeny Prigozhin led his troops to within 124 miles of Moscow, for the ‘criminal organisation’ to be classified as a terror group by the UK.
But Moscow’s apparent attempt to assimilate the soldiers and commanders — together with other PMCs who are said to have committed atrocities in Ukraine — poses new questions about the groups’ aims and financial links.
The Molfar open source intelligence community has been monitoring developments involving the PMCs, also known as non-state security actors. Around 25 are thought by the organisation to have been active in Ukraine since the outset of Russian military aggression in 2014.
They include Rusich, regarded as a neo-Nazi organisation, which is estimated by Molfar to currently have a couple dozen fighters.
Others have been identified by the investigative community as Redut, which has up to 7,000 mercenaries, Achmat, with around 3,500, Veterans, with around 2,000, the Russian Imperial Movement, with around 200, and the Russian Legion and Tiger, with around 500 each.
The UK sanctioned Wagner and a handful of facilitators in March 2023 but the details may already be out of date through the Kremlin’s attempts to absorb or possibly eliminate its leadership.
The tool is meant to freeze assets by preventing any UK business or citizen from dealing with funds held by the designated person and ban the individual from entering or remaining in the UK.
Molfar’s head of research (IT) Maksym Zrazhevskiy told Metro.co.uk: ‘Up to this date, Western countries have imposed sanctions against designated PMCs, with Wagner and the Russian Imperial Movement proscribed as terror groups by France and the US respectively.
‘According to information circulated in the Russian media, some PMCs have already signed contracts with the Russian armed forces. Wagner has only handed over its equipment to the Ministry of Defense.
‘The funding of this criminal organisation remains unknown, so there is plenty of work to be done in simply keeping an eye on the formations and individuals, both on the battlefield and in the business and financial sphere.
‘Media awareness also has a crucial role to play.’
Metro.co.uk told last month how an opaque nexus of formations is now positioned to play a shadowy role in the Kremlin’s power games.
The Wagner mutiny between June 23 and 24 ended with Prigohzin standing his fighters down. They were then given an ultimatum by Putin to sign over to Russia’s regular military, join their leader, then said to be in Belarus, or return to their families.
Uncertainty remains over Prigohzin’s whereabouts, with the Kremlin claiming that he met Putin five days after abandoning his march on Moscow. He has reportedly been in Russia, although he has not made any public appearances via his usual means of social media since the mutiny.
The Russian Ministry of Defense has said the group has handed thousands of tonnes of weaponry and ammunition to the country’s regular forces.
The evidence points to Moscow attempting to clamp down on the private armies, possibly to prevent another element going rogue.
‘We assume that these groups will be absorbed by the Russian Ministry of Defense as with Veterans or Akhmat, who have signed contracts with the regular army,’ Zrazhevskiy explained.
‘This follows Russian defence minister Sergei Shoigu’s resolution on February 15, where it was stated that after July 1 all the PMCs or “voluntary formations” must sign a contract with the Ministry of Defense. After the mutiny they were reminded to do this again, but this time by Dmitry Peskov, Putin’s press attaché.
‘Apparently, the Russian government was aware that a mutiny could happen, so to check unrestrained growth or at least be able to control it, they sought to make PMC soldiers sign contracts as leverage.’
The PMCs have been sanctioned by various Western governments, although the UK has been accused of being slow to tackle Wagner’s ‘Londongrad’ links and has been called upon to proscribe it as a terror group.
Australia, Canada, Japan, the EU, and the US have also sanctioned the profits-driven militia, which is responsible for atrocities and criminal acts across Ukraine and Africa, according to the US Treasury.
Rusich, said to have ties to Wagner, is led by fighters with neo-Nazi views and has left behind ‘serious evidence’ of war crimes in Ukraine, according to the Kharkiv Human RIghts Protection Group.
Patriot, another formation, was sanctioned by the US in April 23, 2023, with the Department of the Treasury’s listing stating that the entity was established in 2018 and is engaged in ‘defence activities’.
The group is said to have been formed as a counter-balance to Wagner under the auspices of defence minister Sergei Shoigu, who was the target of angry video tirades by Prigozhin before the Wagner insurrection.
‘There are instances where peace organisations and Ukrainians have not needed to go into the field to collect evidence of war crimes,’ Zrazhevskiy said. ‘The fighters themselves have proudly shared their “achievements” on Telegram or other social media channels.
‘They include videos of Ukrainian soldiers being beheaded in cold blood. In other violations of the Geneva Convention there are instances of ex-Wagner soldiers admitting that they were executing dozens of civilians, including children, in Bakhmut.
‘Another instance is an ex-Wagner soldier admitting to executing hostages. According to Ukrainian intelligence, Wagner was responsible for a powerful explosion which killed Ukrainian prisoners of war in the temporarily occupied town of Olenivka.
‘Outside Ukraine, they are notorious for war crimes in the Central African Republic where they executed more than 100 civilians in the city of Bambari. The authorities of the CAR state have that it was an “operation to eradicate the rebels”.’
Stephen Reimer, a senior research fellow at the Royal United Services Institute’s Centre for Financial Crime and Security Studies, told Metro.co.uk that the sanctions are being applied in an ‘uneven’ manner.
‘The supposed absorption of the Wagner group into the Russian Ministry of Defence (MoD) might be a cosmetic change,’ he said.
‘I suspect the group will continue with at least some of its operations across Africa, which are self-resourcing and self-financing. I would postulate that the contracts that they have signed with governments around the world, such as Mozambique, to do counter-terrorist operations will continue to go into their accounts, and not into the MoD’s accounts.
‘From a UK point of view, the announcement of sanctions seems to have a performative element that follows the identification of the individuals and organisations concerned. Unfortunately, the implementation piece does not always attract the same care and attention as the announcement piece.’
Prigozhin generated a quarter of a billion dollars from his global natural resources empire in the four years before the full-scale invasion of Ukraine, according to corporate records examined by the Financial Times.
Existing sanctions aimed at the chef-turned-warlord failed to stop his operations reaping in cash amid a trail of alleged human rights abuses across the Middle East and Africa, according to the report.
After the mutiny, Putin said Wagner had been paid more than 86 billion rubles (£726,447) between May 2022 and May 2023.
Sanctions name those giving Russia ‘deniability’
The 2023 UK sanctions against Wagner group members state:
‘There are multiple, credible sources which corroborate and support the conclusion that the existence of the organisation known as the Wagner Group is kept purposefully vague and opaque in order to provide a deniable military capability for the Russian State. The Wagner Group is therefore responsible for, engages in, and provides support for actions which destabilise Ukraine and undermine or threaten the territorial integrity, sovereignty or independence of Ukraine.’
While off-radar leader Yevgeny Prigozhin was sanctioned in 2020, the latest sanctions list other individuals associated with the group including commander Andrei Nikolaevich Troshe and Dmitry Valeryevich Utkin, who is said to have founded the group.
The amounts generated by other PMCs are even more opaque.
‘What needs to be done is to look into Wagner’s companies and complex corporate structures, which allow the group to raise, move and ultimately benefit from their funds,’ Reimer said.
‘There has been some research done by people trying to track down those shell companies but it’s very complicated, the structures are meant to obfuscate, they are the same means used by others, like many Russian oligarchs, to hide their funds. Investigating Wagner’s funds will mean going down many of these rabbit holes.’
Prigozhin himself was sanctioned by the UK in December 2020 but the group itself was not listed until five months later.
‘The sanctioning of Wagner by the UK marks a shift from targeting terrorist groups like ISIS and al-Qaeda,’ Reimer said. ‘But while targeting terror groups like these tends to be uncontroversial, the PMCs are really non-state proxies and there are questions around how we expand sanctions to meet the threat they pose and what our allies are doing.
‘Sanctions are most effective when they are done in concert. So if the UK, US, Canada and the EU designate different entities at different times, it leaves an uneven landscape for the PMCs to exploit.
‘It’s something that needs to looked at almost on a day-by-day basis; you sanction one company and another company or enabler can be established in its place. The network will reform around the pieces that have been targeted by sanctions. Sanctions are not a “one and done” tool.
‘I have no idea how much the Wagner group is worth, but you get an idea from looking at photographs of their offices in St Petersburg, which is a Bond-villain type of building, that they are not short of money.’
In a joint statement issued by G7 leaders in February 2023, the UK government reaffirmed its intention to target those profiting from the war in Ukraine. The relevant passage stated: ‘We continue to impose targeted sanctions, including on those responsible for war crimes or human rights violations and abuses, exercising illegitimate authority in Ukraine, or who otherwise are profiting from the war.’
The following month the government announced the £1 billion UK Integrated Security Fund, intended to keep the country ‘safe and address global sources of volatility and insecurity’.
Part of its remit is to tackle evasion ‘across the UK’s trade, transport and financial sanctions’, including through work with the private sector to ‘maximise’ the reach of the financial measure.
The Foreign, Commonwealth and Development Office said it does not comment on individual cases.